Audit of Information Systems General and Application Controls at AultCare Health Plan

Published by the Office of Personnel Management, Office of Inspector General on 2016-01-21.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                     OFFICE OF AUDITS

            Final Audit Report

        Audit of Information Systems General and Application
                   Controls at AultCare Health Plan

                                           Report Number 1C-3A-00-15-012
                                                  January 21, 2016

                                                             -- CAUTION --
This audit report has been distributed to Federal officials who are responsible for the administration of the audited program. This audit report may
contain proprietary data which is protected by Federal law (18 U.S.C. 1905). Therefore, while this audit report is available under the Freedom of
Information Act and made available to the public on the OIG webpage (http://www.opm.gov/our-inspector-general), caution needs to be exercised
before releasing the report to the general public as it may contain proprietary information that was redacted from the publicly distributed copy.
               EXECUTIVE SUMMARY 

                    Audit of the Information Systems General and Application Controls
                                          at AultCare Health Plan
Report No. 1C-3A-00-15-012                                                                                January 21, 2016

Why Did We Conduct the Audit?              What Did We Find?

The objectives of this audit were to       Our audit of the IT security controls of AultCare determined that:
evaluate controls over the                 	 AultCare has established an adequate security management
confidentiality, integrity, and               program.
availability of Federal Employee Health    	 AultCare has implemented controls to prevent unauthorized
Benefit Plan (FEHBP) data processed           physical access to its facilities, as well as logical controls to protect
and maintained in the AultCare Health         sensitive information. However, there is no technical control to
Plan (AultCare) information technology        detect or prevent                  at AultCare’s data center and other
(IT) environment.                             sensitive areas at its facility.
                                           	 AultCare has implemented an incident response and network
What Did We Audit?                            security program. However, we noted several areas of concern
                                              related to AultCare’s network security controls:
The scope of this audit centered on the        o	 AultCare has not determined what auditable events should be
information systems used by AultCare                logged and reviewed as a part of its incident response program.
to process medical insurance claims for        o	 A firewall baseline configuration standard is not in place.
FEHBP members, with a primary focus            o	
on the claims adjudication applications.


                                              o	 AultCare’s vulnerability management program could be
                                              o	 A methodology is not in place to ensure that unsupported or
                                                   out-of-date software is not utilized.
                                           	 AultCare has developed a configuration management process for
                                              its operating platforms. However, formal baseline configuration
                                              standards are not in place for all servers and database platforms
                                              used by AultCare, and routine compliance auditing is not
                                           	 AultCare has implemented many controls in its claims adjudication
                                              process to ensure that FEHBP claims are processed accurately.

 Michael R. Esser
 Assistant Inspector General
 for Audits

the Act    The Federal Employees Health Benefits Act
AultCare   AultCare Health Plan
CFR        Code of Federal Regulations
FEHBP      Federal Employees Health Benefits Plan
FISCAM     Federal Information System Controls Audit Manual
GAO        U.S. Government Accountability Office
IT         Information Technology
NIST       National Institute of Standards and Technology
OIG        Office of the Inspector General
OMB        Office of Management and Budget
OPM        U.S. Office of Personnel Management
SP         Special Publication



       EXECUTIVE SUMMARY ........................................................................................ i

       ABBREVIATIONS ..................................................................................................... ii 

I.     BACKGROUND ..........................................................................................................1 

II.    OBJECTIVES, SCOPE, AND METHODOLOGY ..................................................2 

III.   AUDIT FINDINGS AND RECOMMENDATIONS.................................................4

       A. Security Management .............................................................................................4 

       B. Access Controls .......................................................................................................5 

       C. Network Security .....................................................................................................7 

       D. Configuration Management ...................................................................................12 

       E. Contingency Planning............................................................................................13 

       F. Claims Adjudication ..............................................................................................15 

IV.    MAJOR CONTRIBUTORS TO THIS REPORT ..................................................18 

V.	    APPENDIX: AultCare Heath Plan’s November 16, 2015 response to the
                 draft audit report, issued September 16, 2015

            I. BACKGROUND
                        TO THIS REPORT

This final report details the findings, conclusions, and recommendations resulting from the audit
of general and application controls over the information systems responsible for processing
Federal Employees Health Benefits Program (FEHBP) claims by AultCare Health Plan

The audit was conducted pursuant to FEHBP contract CS 2723; 5 U.S.C. Chapter 89; and 5 Code
of Federal Regulations (CFR) Chapter 1, Part 890. The audit was performed by the U.S. Office
of Personnel Management’s (OPM) Office of the Inspector General (OIG), as established by the
Inspector General Act of 1978, as amended.

The FEHBP was established by the Federal Employees Health Benefits Act (the Act), enacted on
September 28, 1959. The FEHBP was created to provide health insurance benefits for federal
employees, annuitants, and qualified dependents. The provisions of the Act are implemented by
OPM through regulations codified in Title 5, Chapter 1, Part 890 of the CFR. Health insurance
coverage is made available through contracts with various carriers that provide service benefits,
indemnity benefits, or comprehensive medical services.

All AultCare personnel that worked with the auditors were helpful and open to ideas and
suggestions. They viewed the audit as an opportunity to examine practices and to make changes
or improvements as necessary. Their positive attitude and helpfulness throughout the audit was
greatly appreciated.

This was our first audit of AultCare’s information technology (IT) general and application
controls. We discussed the results of our audit with OPM and AultCare representatives at an exit

                                                1                          Report No. 1C-3A-00-15-012
The objectives of this audit were to evaluate controls over the confidentiality, integrity, and 

availability of FEHBP data processed and maintained in AultCare’s IT environment. We

accomplished these objectives by reviewing the following areas: 

 Security management; 

 Access controls; 

 Network security; 

 Configuration management; 

 Contingency planning; and 

 Application controls specific to AultCare’s claims processing systems. 

Scope and Methodology
This performance audit was conducted in accordance with generally accepted government 

auditing standards issued by the Comptroller General of the United States. Accordingly, we 

obtained an understanding of AultCare’s internal controls through interviews and observations, 

as well as inspection of various documents, including IT and other related organizational policies 

and procedures. This understanding of AultCare’s internal controls was used in planning the 

audit by determining the extent of compliance testing and other auditing procedures necessary to 

verify that the internal controls were properly designed, placed in operation, and effective. 

The scope of this audit centered on the information systems used by AultCare to process medical 

insurance claims for FEHBP members, with a primary focus on the claims adjudication process. 

The business processes reviewed are primarily located in AultCare’s Canton, Ohio facility. 

The on-site portion of this audit was performed in February and March of 2015. We completed 

additional audit work before and after the on-site visit at our office in Washington, D.C. The 

findings, recommendations, and conclusions outlined in this report are based on the status of 

information system general and application controls in place at AultCare as of April 2015. 

In conducting our audit, we relied to varying degrees on computer-generated data provided by 

AultCare. Due to time constraints, we did not verify the reliability of the data used to complete 

some of our audit steps but we determined that it was adequate to achieve our audit objectives. 

However, when our objective was to assess computer-generated data, we completed audit steps 

necessary to obtain evidence that the data was valid and reliable. 

In conducting this review we: 

 Gathered documentation and conducted interviews; 

 Reviewed AultCare’s business structure and environment; 

                                                  2                           Report No. 1C-3A-00-15-012
	 Performed a risk assessment of AultCare’s information systems environment and
   applications, and prepared an audit program based on the assessment and the Government
   Accountability Office’s (GAO) Federal Information System Controls Audit Manual
   (FISCAM); and
	 Conducted various compliance tests to determine the extent to which established controls and
   procedures are functioning as intended. As appropriate, we used judgmental sampling in
   completing our compliance testing.

Various laws, regulations, and industry standards were used as a guide to evaluating AultCare’s
control structure. These criteria include, but are not limited to, the following publications:
	 Title 48 of the Code of Federal Regulations;
	 Office of Management and Budget (OMB) Circular A-130, Appendix III;
	 OMB Memorandum 07-16, Safeguarding Against and Responding to the Breach of
   Personally Identifiable Information;
	 Information Technology Governance Institute’s COBIT: Control Objectives for Information
   and Related Technology;
	 National Institute of Standards and Technology’s (NIST) Special Publication (SP) 800-12,
   Introduction to Computer Security;
	 NIST SP 800-14, Generally Accepted Principles and Practices for Securing Information
   Technology Systems;
	 NIST SP 800-30 Revision 1, Guide for Conducting Risk Assessments;
	 NIST SP 800-34 Revision 1, Contingency Planning Guide for Information Technology
	 NIST SP 800-41 Revision 1, Guidelines on Firewalls and Firewall Policy;
	 NIST SP 800-53 Revision 4, Security and Privacy Controls for Federal Information Systems
   and Organizations; and
	 NIST SP 800-61 Revision 2, Computer Security Incident Handling Guide.

Compliance with Laws and Regulations
In conducting the audit, we performed tests to determine whether AultCare’s practices were
consistent with applicable standards. While generally compliant, with respect to the items tested,
AultCare was not in complete compliance with all standards as described in the “Audit Findings
and Recommendations” section of this report.

                                                3	                         Report No. 1C-3A-00-15-012
              FINDINGS       TO THIS REPORT
                       AND RECOMMENDATIONS

A. Security Management
   The security management component of this audit involved an examination of the policies and
   procedures that are the foundation of AultCare’s overall IT security controls. We evaluated
   AultCare’s ability to develop security policies, manage risk, assign security-related
   responsibility, and monitor the effectiveness of various system-related controls.

   AultCare has implemented a series of formal policies and procedures that comprise its security
   management program. AultCare has also developed a thorough risk management methodology
   that allows AultCare to document, track, and mitigate or accept identified risks in a timely
   manner. AultCare also has adequate human resources policies and procedures related to hiring,
   training, transferring, and terminating employees.

   Although it does have many security management controls in place,               AultCare has
   AultCare does not have a formal training requirement for individuals            developed a
   with specialized IT security responsibility.                                    thorough risk
   NIST SP 800-53, Revision 4, requires organizations to provide role-             methodology.
   based security training to personnel with assigned security roles and

   Requiring employees with specialized IT security responsibility to take routine training
   specifically tailored for their assigned duties increases their ability to address the constant
   changes in IT security best-practices.

   Recommendation 1
   We recommend that AultCare implement requirements for routine training for employees with
   specialized IT security responsibility.

   AultCare Response: 

   “COMPLETE - AultCare agrees and has updated all applicable job descriptions with 

   mandatory annual training hours.” 

   OIG Reply:
   In its response to our draft audit report AultCare provided sufficient evidence to address this
   recommendation; no further action is required.

                                                     4                            Report No. 1C-3A-00-15-012
B. Access Controls
   Access controls are the policies, procedures, and controls used to prevent or detect unauthorized
   physical or logical access to sensitive resources.

   We examined the physical access controls at AultCare’s facilities and data centers located in 

          and           , Ohio. We also examined the logical controls protecting sensitive data in 

   AultCare’s network environment and applications. 

   The access controls observed during this audit include, but are not limited to: 

    Procedures for appropriately granting physical access to facilities and data centers; 

    Procedures for appropriately granting, adjusting, and removing information system access; 

    Strong environment controls within the data centers; and 

    Controls to monitor and filter e-mail and Internet activity.

   The following sections document opportunities for improvement related to AultCare’s physical 

   access controls. 

   1) Access to the Primary Data Center, Sensitive Areas, and Data Center Co-Location
      AultCare’s office space is located within the Aultman Hospital facility, and electronic access 

      cards are used to access the AultCare floors. AultCare’s primary data center, staging room, 

      and telecommunication room are located onsite within this office space, and are protected by 

      an additional card reader. However, we expect the data center and other sensitive spaces of

      all FEHBP contractors to have the following additional controls: 

       A technical or physical control to detect or prevent                                 

                                                          ; and

       AultCare’s data center co-location (backup data center) does require
                             , but it does not have                   or                            .

       Failure to implement adequate physical access controls increases the risk that unauthorized
       individuals can gain access to confidential data. NIST SP 800-53, Revision 4, “Security and
       Privacy Controls for Federal Information Systems and Organizations,” provides guidance for
       adequately controlling physical access to information systems containing sensitive data.

       Recommendation 2
       We recommend that AultCare conduct a review of its physical access controls and implement
       some form of                                  ,                            , and
                  (co-location only) for the data centers and other sensitive areas at its facilities.

                                                    5                          Report No. 1C-3A-00-15-012
   AultCare Response:
   “IN PROCESS - AultCare is evaluating current physical access controls and actively
   quoting available options. An                    policy is being created and AultCare will
   implement mandatory staff training by                 . Implementation of
                  and                   (co-location only) is projected to take place by

   OIG Reply:
   As a part of the audit resolution process, we recommend AultCare provide OPM’s Healthcare
   and Insurance Audit Resolution Group with evidence that AultCare has fully implemented
   this recommendation. This statement applies to all subsequent recommendations in this audit
   report that AultCare agrees to implement.

2) Physical Access Recertification
   AultCare has implemented procedures to remove physical access privileges for terminated
   employees. However, AultCare does not have a process in place to periodically audit a list of
   individuals with physical access privileges against a list of current employees. In addition to
   ensuring that the access cards for terminated employees have been disabled, the audit should
   ensure that the level of access granted to each employee is appropriate and only allows them
   access to the areas necessary to perform their job function.

   We independently compared a list of employees with active access to the AultCare facility to
   a list of employees that were terminated within the last year, and discovered that several
   employees retained access to the facility after their termination.

   NIST SP 800-53, Revision 4, states that an organization must review and analyze system
   audit records for indications of inappropriate or unusual activity. Failure to audit physical
   access privileges increases the risk that a terminated employee could enter a facility and
   steal, modify, or delete sensitive and proprietary information.

   Recommendation 3
   We recommend that AultCare implement a process for routinely auditing all active access
   cards to ensure that they are not assigned to terminated employees, and that the areas of
   access granted to each employee is appropriate to their position. This process should include
   written confirmation from managers.

   AultCare Response: 

   “COMPLETE - AultCare agrees with this recommendation, established the baseline and 

   implemented a policy as of May 2015. AultCare began performing weekly routine audits 

   to monitor this activity in May 2015 and continues to do so.” 

                                                6                           Report No. 1C-3A-00-15-012
       OIG Reply:
       In its response to our draft audit report AultCare provided sufficient evidence to address this
       recommendation; no further action is required.

C. Network Security
   Network security includes the policies and controls used to prevent or monitor unauthorized
   access, misuse, modification, or denial of a computer network and network-accessible resources.

   AultCare has implemented an incident response and network security program. However, we
   noted several opportunities for improvement related to AultCare’s network security controls.

   1) Audit Logging                                                                AultCare could
      AultCare has documented policies and procedures related to incident          improve its
      response. However, AultCare has not determined what auditable                controls related
      events its information systems can and should log, and has not               to system logging
      implemented a process to routinely review system logs.                       and monitoring.

       NIST SP 800-53, Revision 4, states that an organization must determine the information
       system is capable of auditing a list of defined events set by the organization. NIST also
       states that the organization should review and analyze the information system audit records
       and report the findings.

       Failure to log and review information system auditable events increases the risk that
       AultCare will not be able to identify and respond to security incidents in a timely manner.

       Recommendation 4
       We recommend that AultCare determine what auditable events its information systems are
       capable of recording, determine which events are beneficial to log, and implement the
       technical changes to begin collecting log data. In addition, AultCare should implement a
       procedure for routinely reviewing the audit logs.

       AultCare Response: 

       “IN PROCESS - AultCare agrees and has software in place including             ,     and, 

       as of October 12, 2015,         that actively tracks network and system management logs. 

       The logs are reviewed on a routine basis.” 

   2) Firewall Management
      AultCare has implemented firewalls to protect its network environment, and we did not
      identify any concerns with the firewall architecture. However, AultCare has not established
      a formal firewall baseline configuration standard, nor a procedure to routinely audit current
      firewall settings against a baseline.

                                                    7                           Report No. 1C-3A-00-15-012
     NIST SP 800-41, Revision 1, states that a firewall policy should dictate how firewalls handle
     network traffic based on the organization’s information security policies, and a risk analysis
     should be performed to determine types of traffic needed by the organization. The policy
     should also include specific guidance on how to address changes to the rule set.

     Failure to develop a firewall configuration policy and manage the settings increases 

     AultCare’s exposure to unsecure traffic and vulnerabilities. 

     Recommendation 5
     We recommend that AultCare develop a corporate firewall baseline configuration and
     implement a process for routinely auditing actual firewall settings against the baseline.

     AultCare Response: 

     “IN PROCESS - AultCare agrees with the recommendation and has begun the process of 

     establishing an independent firewall and creating the baseline. The estimated completion 

     date for this project is           .” 


     Recommendation 6
     We recommend that AultCare implement

     AultCare Response: 

     “IN PROCESS - AultCare agrees and is in the process of                                      

                 . Full implementation is expected by                       .” 

                                                  8                            Report No. 1C-3A-00-15-012

     Recommendation 7

     AultCare Response:
     “IN PROCESS - AultCare agrees and is beginning to establish
            . Expected implementation date is            .”

5) Vulnerability Scanning/Remediation                                     AultCare should
   AultCare utilizes a 3rd party contractor to conduct annual             perform routine
   penetration testing on its technical environment. After the            vulnerability scanning
   testing has been completed, AultCare works to remediate any            on its systems.
   vulnerabilities identified in a timely manner. However,
   AultCare does not have its own vulnerability scanning tools nor procedures to conduct more
   routine scans and remediate any vulnerabilities identified. It is best practice to perform
   vulnerability scanning on a relatively frequent basis (measured in weeks or months, but not
   annually) - especially in today’s IT security environment where new vulnerabilities are
   discovered on a daily basis.

     NIST SP 800-53 states that an organization should routinely scan for vulnerabilities in the
     information systems and hosted applications. It also states that an organization should
     analyze vulnerability scan reports and results, then remediate the legitimate vulnerabilities.

     Failure to identify and remediate known vulnerabilities greatly increases the organization’s
     risk to easily exploited weaknesses. This may lead to a loss of personal health information
     and control of information systems and applications.

                                                  9                           Report No. 1C-3A-00-15-012
   Recommendation 8
   We recommend that AultCare implement a process to perform routine automated
   vulnerability scans to ensure all known weaknesses within the information systems are
   identified in a timely manner. This process should include a methodology to analyze the
   vulnerability scan reports, identify legitimate vulnerabilities, and remediate them in a timely
   manner and/or document the acceptance of the risk.

   AultCare Response: 

   “IN PROCESS - AultCare agrees with this recommendation and contracted with                ,

   a third party, to complete a Vulnerability Scan in May 2015. Results are available upon 

   request. Remediation of the results is in process. AultCare will continue to have third 

   party scans performed annually, at a minimum.” 

   OIG Reply:
   Contracting vulnerability assessment work to a vendor is an acceptable approach to
   implementing this recommendation. However, as stated above, it is best practice to perform
   vulnerability scanning on a relatively frequent basis (measured in weeks or months, but not
   annually). Scanning only once per year increases the risks that unknown or un-remediated
   vulnerabilities exist for an extended period of time. We continue to recommend that
   AultCare perform weekly or monthly automated vulnerability scans in addition to its annual
   penetration test work.

6) Vulnerabilities Identified in Scans                                   OIG test work
   As mentioned above, we believe that AultCare’s vulnerability          identified a variety of
   management program could be improved. As part of this audit,          system vulnerabilities
   we also independently performed our own automated                     that could have been
   vulnerability scans on a sample of AultCare’s servers, databases, detected by a mature
   web applications, and user workstations. Our test work                vulnerability
   identified a variety of vulnerabilities that could have potentially   assessment program.
   been previously detected and remediated by AultCare if it had a
   more mature vulnerability management program in place. The specific vulnerabilities that
   we identified will not be detailed in this report, but are summarized at a high level below.
   Copies of the full scan reports were provided directly to AultCare during the audit.

   System Patching
   AultCare appears to be generally compliant with its patch management policies and
   procedures. However, our scans detected several instances where critical patches were not
   installed in accordance with the policy. The missing patches included both operating system
   and third-party software.

                                                10                          Report No. 1C-3A-00-15-012
Antivirus Updates
The results of the vulnerability scans indicated that several installations of AultCare’s
antivirus software tool had out of date antivirus signatures.

Noncurrent Software
The results of the vulnerability scans indicated that several servers and workstations
contained noncurrent software applications that were no longer supported by the vendors,
and have known security vulnerabilities. AultCare had not documented a business need to
maintain this software.

Server Configuration Vulnerabilities
The results of our scans identified that isolated server configuration vulnerabilities with
known exploits exist in AultCare’s technical environment.

Web Application Vulnerabilities
The results of the web application vulnerability scans also indicated that the AultCare web
application has several vulnerabilities that are susceptible to common malicious attack

FISCAM states that “Software should be scanned and updated frequently to guard against
known vulnerabilities.” NIST SP 800-53, Revision 4, states that the organization must
identify, report, and correct information system flaws and install security-relevant software
and firmware updates promptly. FISCAM also states that “Procedures should ensure that
only current software releases are installed in information systems. Noncurrent software may
be vulnerable to malicious code such as viruses and worms.”

The vulnerabilities identified in our test work increase the risk that a malicious attack on
AultCare’s technical environment would be successful.

Recommendation 9
We recommend that AultCare make the appropriate changes to its servers, workstations, and
web applications to address the specific vulnerabilities identified in our vulnerability scans.

AultCare Response:
“IN PROCESS - AultCare agrees and has been addressing the results of the May 2015
external vulnerability scan. AultCare itself will be purchasing a scanning system, but will
also continue to have a third party vendor scan annually. Results of each scan will be
addressed accordingly. AultCare scanning system expected implementation date is
June 30, 2016.”

                                             11                           Report No. 1C-3A-00-15-012
       Recommendation 10
       We recommend that AultCare implement a methodology to ensure that only current and
       supported versions of system software are installed on the production servers and
       workstations. If a business need necessitates the use of outdated software, AultCare should
       document this exception.

       AultCare Response: 

       “IN PROCESS - AultCare agrees with this recommendation and is currently in the process 

       of evaluating                                     . Expected implementation date is 


D. Configuration Management
   We evaluated AultCare’s configuration management program as it relates to the operating
   platforms that support the processing of FEHBP claims, and determined that the following
   controls were in place:
    Established server build documents; and
    A system software change control process.

   The sections below document areas for improvement related to AultCare’s configuration 

   management controls. 

   1) Security Baseline Configurations
      AultCare has not documented security baseline configuration standards for all operating
      platforms used in its technical environment. A baseline configuration is a formally approved
      policy or standard outlining how to securely configure an operating platform.

       NIST SP 800-53, Revision 4, states that an organization should develop, document, and
       maintain a current baseline configuration of the information system.

       Failure to establish approved system configuration settings increases the risk the system may
       not meet performance or security requirements defined by the organization.

       Recommendation 11
       We recommend that AultCare document approved baseline configurations for all server and
       database platforms used in its environment.

       AultCare Response: 

       “IN PROCESS - AultCare agrees and is in the process of creating Configuration Policies 

       to document approved baselines for both    and           . The policies will be complete 

       by December 31, 2015.” 

                                                  12                          Report No. 1C-3A-00-15-012
   2) Configuration Compliance Auditing
      As noted above, AultCare does not maintain approved operating platform configuration
      baselines for its servers and databases. Therefore, AultCare cannot effectively audit the
      system’s security settings (i.e., there are no approved settings to which to compare the actual

       FISCAM states that organizations should require, “current configuration information to be
       routinely monitored for accuracy. Monitoring should address the baseline and operational
       configuration of the hardware, software, and firmware that comprise the information

       Failure to implement a thorough configuration compliance auditing program increases the
       risk that insecurely configured servers exist undetected, creating a potential gateway for
       malicious virus and hacking activity.

       Recommendation 12
       We recommend that AultCare routinely audit all server and database security configuration
       settings to ensure they are in compliance with approved baselines.

       AultCare Response: 

       “IN PROCESS - AultCare agrees and is in the process of documenting the approved 

       baseline configurations. Upon completion, AultCare will begin routine audits. 

       Implementation is to be expected by July 31, 2016.” 

E. Contingency Planning
   We reviewed the following elements of AultCare’s contingency planning program to determine
   whether controls were in place to prevent or minimize interruptions to business operations when
   disrupting events occur:
    Disaster recovery plan;
    Business continuity plan; and
    Emergency response procedures.

   We determined that the contingency planning documentation contained the critical elements
   suggested by NIST SP 800-34, Revision 1, “Contingency Planning Guide for Federal
   Information Systems.” AultCare has also identified and prioritized the systems and resources
   that are critical to business operations, and has developed detailed procedures to recover those
   systems and resources.

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                                                                            AultCare has developed a
The sections below document areas for improvement related to                thorough disaster recovery
AultCare’s contingency planning controls.                                   plan, but has not completed
                                                                            a feasibility assessment or a
1) Feasibility Assessment                                                   functional test of this plan.
   AultCare’s current business continuity plan involves the use of approximately 20 user
   workstations that are stored at the backup facility. These machines would be loaded with the
   necessary software and provided to the users to continue AultCare’s business operations.
   However, AultCare’s employee population is approximately 500 individuals, and AultCare
   has not conducted a feasibility assessment to ensure that the number of on hand workstations
   would meet the needs of the organization in the event of a disaster.

   NIST SP 800-53, Revision 4, states an organization should develop a contingency plan that
   identifies essential missions and business functions and the associated contingency

   Failure to evaluate the feasibility of the business continuity plan increases the risk that an
   organization cannot maintain business operations when disrupting events occur.

   Recommendation 13
   We recommend that AultCare conduct a feasibility assessment on the current contingency
   plan to ensure that it can meet the objectives set by the organization in the event of a

   AultCare Response: 

    “IN PROCESS - AultCare agrees with this recommendation and will conduct a 

   contingency plan feasibility test during first quarter of 2016. The estimated date of 

   completion is March 1, 2016.” 

2) Functional Disaster Recovery Tests
   AultCare has documented disaster recovery plans and conducts routine disaster recovery
   tabletop tests. However, AultCare has not conducted a functional disaster recovery test.
   This is further compounded by the fact that AultCare has not conducted a feasibility
   assessment to ensure they have the proper resources in place to recover from a disrupting

   NIST SP 800-53, Revision 4, states that an organization should test the contingency plan for
   the information system to determine the effectiveness of the plan and organization readiness
   to execute the plan.

                                                 14                           Report No. 1C-3A-00-15-012
       Functional disaster recovery tests allow an organization to evaluate the effectiveness of the
       contingency plan. Failure to do so increases the risk that an organization cannot recover
       from a disrupting situation in a timely manner.

       Recommendation 14
       We recommend that AultCare routinely conduct functional tests of its disaster recovery test
       to evaluate its effectiveness.

       AultCare Response: 

       “COMPLETE - AultCare agrees and has completed a two part Functionality test which 

       was concluded in October 2015.” 

       OIG Reply:
       In its response to our draft audit report AultCare provided sufficient evidence to address this
       recommendation; no further action is required.

F. Claims Adjudication
   The following sections detail our review of the applications and business processes supporting
   AultCare’s claims adjudication process.

   1) Application Change Management                                             AultCare has
      We evaluated the policies and procedures governing application            implemented a
      development and change control of AultCare’s claims processing            thorough application
      applications.                                                             change management
       AultCare has implemented policies and procedures related to
       application configuration management, and has also adopted a system development life cycle
       methodology that IT personnel follow during routine software modifications. We observed
       the following controls related to testing and approvals of software modifications:
        AultCare has adopted practices that allow modifications to be tracked throughout the
           change process;
        Code, unit, system, and quality testing are all conducted in accordance with industry
           standards; and
       	 AultCare uses a business unit independent from the software developers to move the code
           between development and production environments to ensure adequate segregation of

       Nothing came to our attention to indicate that AultCare has not implemented adequate
       controls related to the application configuration management process.

                                                    15 	                        Report No. 1C-3A-00-15-012
2) Claims Input, Processing, and Output Controls
   We evaluated the input, processing, and output controls associated with AultCare’s claims
   adjudication process. We have determined the following controls are in place over
   AultCare’s claims adjudication system:
    Routine reviews are conducted on AultCare’s front-end scanning process for incoming
       paper claims;
    Claims are monitored as they are processed through the system; and
    Claims output files are fully reconciled.

   During the review of the physical environment for claims input we noted that checks are not
   secured after they are identified in incoming mail. Failure to protect financial assets
   increases the probability of loss.

   Recommendation 15
   We recommend that AultCare add a secure location for incoming checks in the mailroom.

   AultCare Response: 

   “COMPLETE - AultCare agrees and created a Policy requiring all incoming FEHB[P] 

   checks to be logged and housed in a locked cabinet until retrieved by the Finance.” 

   OIG Reply:
   In its response to our draft audit report AultCare provided sufficient evidence to address this
   recommendation; no further action is required.

3)	 Enrollment
    We evaluated AultCare’s procedures for managing its member enrollment data. Enrollment
    information is received electronically and compared to the member database. Necessary
    changes are reported to the eligibility office and updated in the database. Changes are
    verified during the next database comparison.

   Nothing came to our attention to indicate that AultCare has not implemented adequate
   controls over the enrollment process.

4)	 Debarment
    We evaluated AultCare’s procedures for updating its claims system with debarred provider
    information. AultCare downloads the OPM OIG debarment list every month and makes the
    appropriate updates to its claims processing system. Providers are flagged in the system for
    both future and past claims. Any claim submitted for a debarred provider is flagged by
    AultCare to adjudicate through the OPM OIG debarment process to include initial
    notification, a 15-day grace period, and then denial of claims.

                                                16 	                        Report No. 1C-3A-00-15-012
   Nothing came to our attention to indicate that AultCare has not implemented adequate
   controls over the debarment process.

5) Special Investigation/Fraud
   We evaluated AultCare’s policies and procedures surrounding its efforts to detect fraud and
   abuse in the FEHBP line of business. AultCare has implemented a special investigations unit
   that has access to all employees and facilities for investigation purposes. AultCare’s policy
   is to refer investigative cases to the OPM OIG only after fraud is confirmed. However,
   AultCare’s contract with OPM requires AultCare to immediately notify our office of all
   potential fraud cases.

   Recommendation 16
   We recommend that AultCare update it policy to require the referral of all possible fraud
   cases to the OPM OIG.

   AultCare Response: 

   “COMPLETE - AultCare agrees and updated the current Fraud Policy accordingly.” 

   OIG Reply:
   In its response to our draft audit report AultCare provided sufficient evidence to address this
   recommendation; no further action is required.

                                                17                          Report No. 1C-3A-00-15-012

Information Systems Audit Group

                , Lead IT Auditor-In-Charge
              , Lead IT Auditor
            , IT Auditor

                , Group Chief

                                              18   Report No. 1C-3A-00-15-012
                                      V. APPENDIX

November 16, 2015 
AultCare Health Plan  
              , Compliance Officer 
2600 6  St. SW 
Canton, OH 44710 
Reference:                     OPM Draft Audit Report 
                                                                 AultCare Health Plan IT Audit 
                                                                 Plan Code 3A 
                                                                 Audit Report Number 1C‐3A‐00‐15‐012 
The following report represents AultCare Health Plan’s response to the recommendations included in 
the Draft Audit Report dated September 16, 2015.  

Security Management  

Recommendation 1 ‐ We recommend that AultCare implement requirements for routine training for 
employees with specialized IT security responsibility. 

Response ‐ COMPLETE ‐ AultCare agrees and has updated all applicable job descriptions with mandatory 
annual training hours.  See attachments A‐1 – A‐7. 

 Access Controls 

Recommendation 2 ‐ We recommend that AultCare conduct a review of its physical access controls and 
implement some form of                                   ,                               , and   
           (co‐location only) for the data centers and other sensitive areas at its facility. 

Response – IN PROCESS ‐ AultCare is evaluating current physical access controls and actively quoting 
available options.   An                    policy is being created and AultCare will implement mandatory 
staff training by                 .  Implementation of                               and                 
(co‐location only) is projected to take place by                .   

Recommendation 3 ‐ We recommend that AultCare implement a process for routinely auditing all active 
access cards to ensure that they are not assigned to terminated employees, and that the areas of access 
granted to each employee is appropriate to their position.  This process should include written 
confirmation from managers. 

Response ‐ COMPLETE ‐ AultCare agrees with this recommendation, established the baseline and 
implemented a policy as of May 2015. AultCare began performing weekly routine audits to monitor this 
activity in May 2015 and continues to do so.  See attachments B‐1 – B‐2 

                                                                                 Report No. 1C-3A-00-15-012
Network Security 

Recommendation 4 ‐ We recommend that AultCare determine what auditable events its information 
systems are capable of recording, determine which events are beneficial to log, and implement the 
technical changes to begin collecting log data.  In addition, AultCare should implement a procedure for 
routinely reviewing the audit logs. 

Response – IN PROCESS ‐ AultCare agrees and has software in place including         ,   and, as of 
October 12, 2015,          that actively tracks network and system management logs.  The logs are 
reviewed on a routine basis.  

Recommendation 5 ‐ We recommend that AultCare develop a corporate firewall baseline configuration, 
and implement a process for routinely auditing actual firewall settings against the baseline. 

Response – IN PROCESS ‐ AultCare agrees with the recommendation and has begun the process of 
establishing an independent firewall and creating the baseline.  The estimated completion date for this 
project is            . 

Recommendation 6 ‐ We recommend that AultCare implement                                            

Response –IN PROCESS ‐ AultCare agrees and is in the process of r                                              
      . Full implementation is expected by                  

Recommendation 7 ‐                                                                                         

Response – IN PROCESS ‐ AultCare agrees and is beginning to establish an i                             
       .   Expected implementation date is             .  

Recommendation 8 ‐ We recommend that AultCare implement a process to perform routine automated 
vulnerability scans to ensure all known weaknesses within the information systems are identified in a 
timely manner.  This process should include a methodology to analyze the vulnerability scan reports, 
identify legitimate vulnerabilities, and remediate them in a timely manner and/or document the 
acceptance of the risk.   

Response – IN PROCESS ‐ AultCare agrees with this recommendation and contracted with               , a 
third party, to complete a Vulnerability Scan in May 2015.  Results are available upon request.  
Remediation of the results is in process.  AultCare will continue to have third party scans performed 
annually, at a minimum. 

Recommendation 9 ‐ We recommend that AultCare make the appropriate changes to its servers, 
workstations, and web applications to address the specific vulnerabilities identified in our vulnerability 

                                                                                    Report No. 1C-3A-00-15-012
Response – IN PROCESS ‐ AultCare agrees and has been addressing the results of the May 2015 external 
vulnerability scan.  AultCare itself will be purchasing a scanning system, but will also continue to have a 
third party vendor scan annually.  Results of each scan will be addressed accordingly.  AultCare scanning 
system expected implementation date is June 30, 2016. 

Recommendation 10 ‐ We recommend that AultCare implement a methodology to ensure that only 
current and supported versions of system software are installed on the production servers and 
workstations.  If a business need necessitates the use of outdated software, AultCare should document 
this exception.   

Response – IN PROCESS ‐ AultCare agrees with this recommendation and is currently in the process of 
evaluating                                         . Expected implementation date is              . 

Configuration Management 

Recommendation 11 ‐ We recommend that AultCare document approved baseline configurations for all 
server and database platforms used in its environment.    

Response – IN PROCESS ‐ AultCare agrees and is in the process of creating Configuration Policies to 
document approved baselines for both      and           .  The policies will be complete by December 
31, 2015. 

Recommendation 12 ‐ We recommend that AultCare routinely audit all server and database security 
configuration settings to ensure that they are in compliance with approved baselines.   

Response – IN PROCESS ‐ AultCare agrees and is in the process of documenting the approved baseline 
configurations. Upon completion, AultCare will begin routine audits.   Implementation is to be expected 
by July 31, 2016. 

Contingency Planning 

Recommendation 13 ‐ We recommend AultCare conduct a feasibility assessment on the current 
contingency plan to ensure that it can meet the objectives set by the organization in the event of a 

Response – IN PROCESS ‐ AultCare agrees with this recommendation and will conduct a contingency 
plan feasibility test during first quarter of 2016.  The estimated date of completion is March 1, 2016.   

Recommendation 14 ‐ We recommend AultCare routinely conduct functional tests of its disaster 
recovery to evaluate its effectiveness.      

Response ‐ COMPLETE ‐ AultCare agrees and has completed a two part Functionality test which was 
concluded in October 2015. See attachments C‐1 – C‐2. 

                                                                                    Report No. 1C-3A-00-15-012
Claims Adjudication 

Recommendation 15 ‐ We recommend that AultCare add a secure location for incoming checks in the 

Response ‐ COMPLETE ‐ AultCare agrees and created a Policy requiring all incoming FEHB checks to be 
logged and housed in a locked cabinet until retrieved by the Finance.  See attachments D‐1 – D‐2. 

Recommendation 16 ‐ We recommend that AultCare update its policy to require the referral of all 
possible fraud cases to the OPM OIG. 

Response ‐ COMPLETE ‐ AultCare agrees and updated the current Fraud Policy accordingly. See 
attachment E. 

Thank you for providing the opportunity to respond to your recommendations and provide an update 
for the Final Report.  If you have any questions, please feel free to contact me at 330‐363‐1363. 
Compliance Officer 
Attachments A‐E 

                                                                              Report No. 1C-3A-00-15-012

               Report Fraud, Waste, and 


                        Fraud, waste, and mismanagement in
                     Government concerns everyone: Office of
                         the Inspector General staff, agency
                      employees, and the general public. We
                    actively solicit allegations of any inefficient
                          and wasteful practices, fraud, and
                     mismanagement related to OPM programs
                    and operations. You can report allegations
                                to us in several ways:

     By Internet:        http://www.opm.gov/our-inspector-general/hotline-to-

      By Phone:          Toll Free Number:                  (877) 499-7295
                         Washington Metro Area:             (202) 606-2423

        By Mail:         Office of the Inspector General
                         U.S. Office of Personnel Management
                         1900 E Street, NW
                         Room 6400
                         Washington, DC 20415-1100